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Current Affairs

India’s factory activity decreases

Date: 06 April 2021 Tags: Reports & Indices


India’s Manufacturing Purchasing Managers’ Index (PMI) has fallen to a seven-month low of 55.4 from 57.5 in February. 



The index reflects the slowdown in the manufacturing sector that has escalated post the surge in new covid cases.



  • The results indicated that the slowdown emerged from COVID-19 restrictions related to workforces.

  • The rate of contraction was average but it was quickest since September 2020. It also showed loss of jobs in the sector.

  • The rate of inflation was one of the strongest in recent years due to rise in prices of chemical, metal, plastic, rubber and textile.


Indication of index

  • Though PMI has slowed, it has remained in acceptable limits. The further lockdown measures could impact activity.

  • The prediction that vaccination programme would control the disease and enhance output growth will act as a positive confidence building measure.


Purchasing Managers Index

  • Purchasing Managers Index shows the direction of economic trends in the manufacturing and service sectors of the economy.

  • It includes a diffusion index that indicates whether market conditions are expanding, staying the same, or contracting.

  • The aim of the PMI is to give information about current and future business conditions to company decision makers, analysts, and investors.